confidentially speaking
The Africa Confidential Blog
SOUTH AFRICA: The politics of graft is centre-stage with ex-President Zuma back in court as chief of new anti-corruption force is appointed
Patrick Smith
We start in Pretoria where newly-elected President Cyril Ramaphosa is due to announce his cabinet but to the north, the forex crisis in Zimbabwe
is getting worse. Incumbent President Peter Mutharika is facing the fight of his life in Malawi's elections
and Algeria is set to delay its presidential poll. Kenya's
economic team has issued another Eurobond and political sparring
partners are limbering up ahead of elections in 2021.
SOUTH AFRICA: The politics of graft is
centre-stage with ex-President Zuma back in court as chief of new
anti-corruption force is appointed
The timing was so convenient. Five days before Cyril Ramaphosa is due
to be inaugurated as President on 25 May, his vilified predecessor Jacob
Zuma, 77, goes back to court in Durban to face multiple
charges of racketeering and money laundering around the government's
US$6billion arms deal with Western companies two decades ago.
It fitted well into Ramaphosa's choreographed campaign to
convince South Africans that he is serious about
fighting the graft and patronage that has so damaged the economy and
social services. He says he has heard the voice of the electorate whose
support for the African National Congress slipped to 57%, its lowest
level since the first free elections.
On 17 May, Ramaphosa appointed veteran lawyer Hermione
Cronje to run the Investigative Directorate, a part of the
National Director of Public Prosecutions' office, which is to take on
cases of 'complex corruption'. Its first priority will be to take on
the many cases arising out of the Zondo commission on state capture
which is hearing testimony on how local and foreign companies used
political connections under Zuma's presidency to extract billions of
rands from state coffers.
To make this work, Ramaphosa will still have to push through
changes at the DPP's office, which had been hollowed out and find a way
to replace the Public Protector, Busisiwe Mkhwebane,
who is a staunch Zuma loyalist. Insiders say that Ramaphosa will purge
some of the ousted leader's closest allies from government.
The first two names on the list of departing ministers are Bathabile
Dlamini, Women's Minister, and Nomvula Mokonyane,
Environment Minister. Both have been accused of corruption in public
testimony but deny all wrongdoing.
The trade unions and the Communist Party, which backed
Ramaphosa's bid for the ANC leadership two years ago are telling him to
cut the cabinet by a third and sack anyone accused of corruption. More
delicate for Ramaphosa is their demand that Finance Minister Tito
Mboweni and Public Enterprise Minister Pravin Gordhan should be kept out of the new cabinet due to their pro-market policies.
ZIMBABWE: Inflation hits 75% as foreign exchange
crisis bites despite government claims of a $500 million inflow
The price of basic commodities is skyrocketing, the government's
surrogate currency – the bond note – is crashing against the US dollar
and the hoped-for new investors remain elusive.
Two big consequences are set to follow. Opposition groups and
trade unions are gearing up for more protests over the rising cost of
living and worsening unemployment.
Investors will stay away until President Emmerson
Mnangagwa's government does more to reassure them on market
transparency or commitments on structural economic reforms. A case in
point is Reserve Bank governor John Mangudya's
announcement that an 'international bank' was lending the country '$500
million' to staunch the foreign exchange crisis.
No further details have been given about the source of the
funds. So far, the most helpful lender to Zimbabwe this year has been
the Cairo-based Afreximbank but market sources say it is not linked to
this latest loan. Neither is China, the sources say,
which has been taking an increasingly tough line on bail-outs for
Zimbabwe.
The bigger point is the opacity of the issuance and management
of Zimbabwe's bond notes which have depreciated by over a third this
month. They are currently trading at seven to the US dollar on the
parallel market; less than half the official rate.
There are widespread suspicions that officials with privileged
access to US dollars are doing roundtripping currency deals:
buying at one rate and selling at the other.
MALAWI: Mutharika's uphill battle in the presidential
elections
Peter Mutharika faces an uphill battle to win another presidential term
in elections on 21 May after a bitter campaign in which all parties
have accused their rivals of corruption, and planning electoral fraud.
Yet the rhetoric – and the lingering fights over
responsibility for the 'Cashgate' scandal – has masked the lack of
policy differences between the parties.
Mutharika's poor governance record and deepening unpopularity
are a key factor. Divisions caused by Vice-President Saulos
Chilima's decision to run against his boss have split the
ruling party. They have also handed Malawi Congress Party candidate Lazarus
Chakwera the best chance of taking the presidency in 25
years.
ALGERIA: The transition may stretch out for
another six months as protestors call for political reforms and more
sackings
Although presidential elections had been pencilled in for 4 July, with
a deadline of 25 May for would-be presidential candidates to collect
and submit the 60,000 signatures needed to stand, many are calling for
more extended interregnum after President Abdelaziz Bouteflika
was pushed out of power.
The latest reports suggest that national elections could be
delayed until the end of the year. Protestors are continuing their
protests each Friday and are demanding that top officials be sacked
from government and face trial if there are credible accusations of
misconduct.
Among the names proposed for the transitional government until
elections are: conservative former minister Ahmed Taleb
Ibrahimi and technocrat former prime minister Ahmed
Benbitour.
ZAMBIA: Thousands of jobs and billions of dollars
at stake as President Lungu steps up fights over taxes and royalties
with mining giant
Faced with ebbing political support and a debt service crisis
threatening to spin out of control, President Edgar Lungu
is taking on foreign mining companies with an economic nationalist
policy stance. It looks like a replay of tactics used with some success
by Tanzania's John Magufuli.
Lungu's recent broadsides against foreign mining firms have
ended in his government announcing plans to take over Vedanta Resources
Ltd.'s domestic copper assets.
Having long complained that mining firms weren't paying enough
tax, and increasing royalties for the mining sector, Lungu's
administration threatened to 'divorce' Vedanta and Glencore, two of the
biggest employers in Africa's second-largest copper producer.
The Copperbelt region is vital to Lungu's hopes of retaining
power. It was the scene of a damaging by-election defeat in April of
the ruling Patriotic Front by the National Democratic Congress set
up by Chishimba Kambwili, a former minister and
erstwhile Lungu ally.
Last month, Glencore announced it would be closing two shafts
at the Nkani mine in Kitwe at a cost of over 2,000 jobs as they had
reached 'the end of their economic life'.
KENYA: After China rejects fresh finance deal and
unfazed by galloping levels of debt service obligations, President
Kenyatta issues another Eurobond
The government's unheralded issuance of another $2.1 billion Eurobond
in the week ending 17 May amplifies growing concerns about the
government's finance gamble.
Priding itself on a tradition of financial expertise and the
country's strong and diversified economic growth, Kenya's Treasury
rejects criticism over mounting debt levels.
It seems the latest bond issue is partly in response to the
government's failure at April's Belt and Road Forum to secure new
Chinese loans for the next stage of the Standard Gauge Railway taking
its line out to Narok and Kisumu.
The bond issue had mixed reactions in Nairobi. The 7% and 8% interest
rates on $900 million worth of seven-year bonds and $1.2 billion of
12-year paper are better than expected as the government has not
resolved its differences with the IMF. It looks like the markets are
less worried about Kenya's financing strategy than oppositionists or
the IMF.
UGANDA: Opposition music star Bobi Wine accuses
the government of 'financial strangulation' ahead of elections
It may be two years away but the next election has triggered
campaigning and accusations on all sides. Opposition MP Robert
Kyagulanyi, known as Bobi Wine, says
government forces have cancelled over 100 of his concerts since his
election to Parliament in 2017. Now, the popular musician, whose rap
and reggae concerts were pulling tens of thousands, claims that
officials are intimidating his business partners to bankrupt him.
Wine is determined to stand against President Yoweri
Museveni, 74, whose National Resistance Movement in February
endorsed him to stand for a seventh term in 2021. Wine's People Power
movement has suggested that it has opened talks with the Forum for
Democratic Change, Uganda's largest opposition party,
in the hope that the FDC will agree to back his candidacy.
It has already won backing from a group of smaller parties.
But agreeing a deal between Wine and veteran oppositionist Kizza
Besigye, who leads the FDC, will be difficult, not least
because of the bad blood between their respective supporters.
THE WEEK AHEAD IN BRIEF
NIGERIA: After fighting with government
over disputed back taxes, MTN races to second biggest company slot when
it floats on Nigeria's Stock Exchange
GUINEA: Veteran investor Friedland said
to be near taking over the fabled Nimba ore deposit as government tries
to resolve legal tangles
